Hungarian Forint: NBH stance supports carry appeal – ING
ING’s Frantisek Taborsky expects the National Bank of Hungary to pause its mini easing cycle at 5.50% and possibly outline a two-step cut in its inflation target from 3.0% to 2.0%.
ING analyst Frantisek Taborsky anticipates the National Bank of Hungary will maintain its current policy rate of 5.50% and potentially adjust its inflation target downward from 3.0% to 2.0%. A pause in the mini easing cycle and a lower inflation target could bolster the Hungarian Forint and long-term bonds, despite high global energy volatility and limited opportunities for a sustained currency rally.
The market has already adjusted expectations higher in response to potential policy changes, but a sustained rally in FX and fixed income seems improbable without geopolitical progress.
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